Consumer Foodservice in Indonesia

Abstract

Why buy this report

• Get insight into trends in market performance
• Pinpoint growth sectors and identify factors driving change
• Identify market and brand leaders and understand the competitive environment

Product coverage

Consumer foodservice by chained/independent; Consumer foodservice by type; Consumer foodservice by type and chained/independent

Executive summary

Consumer foodservice registers robust growth in 2006

Consumer foodservice recorded strong value growth over the review period, with only a small slowdown in growth in 2006, as prices increased. The slowdown was attributed to the marginally slower volume growth of transactions. Diminished consumer purchasing power, especially in the first half of 2006, and declining foreign tourist arrivals due to natural disasters and the Avian Flu outbreak militated against stronger growth. Nonetheless, 2006 was still a very strong year for the Indonesian consumer foodservice industry.

Chained consumer foodservice brands target the young population

In 2006, several chained consumer foodservice brands in Indonesia employed strategies to attract young consumers. Some brands, including Dunkin' Donuts and Es Teler 77, upgraded their stores in 2006 with cosy sofas, attractive interior designs, and soothing background music, to appeal to young professionals and youths. Meanwhile, brands such as Starbucks and Pizza Hut co-branded with credit card issuers to target young adults by offering discounts at their outlets. The perception that younger people are more open to new concepts means that consumer foodservice players consider this consumer group the most likely driver of growth.

Further penetration of international brands

Despite the strong presence of local consumer foodservice providers, there remains large space for international players, particularly in cafés/bars, full-service restaurants, and fast food, to operate. In 2006 international brands such as Bistro Délifrance, Pizza Marzano, and Krispy Kreme made inroads in Jakarta. Meanwhile, well-established players such as Starbucks, KFC, McDonald' s, and Pizza Hut opened outlets in smaller cities in 2006, as these brands already have a strong foothold in the major Indonesian cities.

Chained consumer foodservice is expanding rapidly

Consumer foodservice in Indonesia was still largely made up of independent operators up to 2006. However, despite the continuing domination of independent units, chained consumer foodservice kept growing in 2006, as franchising agreements continued to expand rapidly and metropolitan consumers increasingly chose to eat out. With franchising being one of the main drivers of growth, chained consumer foodservice enjoyed more robust growth in terms of transactions, and kept pace with independent alternatives in terms of unit/outlet increases and value growth in 2006.

Brighter years ahead for consumer foodservice in Indonesia

Consumer foodservice in Indonesia is expected to register a faster constant value CAGR over the forecast period than that recorded over the review period. Consumer foodservice will benefit from the growing trend towards eating out and from higher prices due to increased raw material costs and rising disposable incomes. As the country' s economic condition showed signs of recovery towards the end of 2006, consumer purchasing power is predicted to gradually improve over the forecast period. Full-service restaurants are expected to perform strongly in value growth terms over the forecast period, due to transaction sales remaining strong, but more importantly due to significant price increases.